The rollout of GST on the 1st July 2017, led many traders spend the entire working day, trying to decode the system. A shopkeeper in Delhi mentioned that he was selling wheat in loose form without charging GST, however, if he sold it in a packaged form, GST would have been applicable on the same. The entire wholesale market in Delhi has gone kaput with the new complex tax regime. The purchasers as well as the customers have decided to halt the business for some time, until the tax system is clear to them.
Delhi thrives on the wholesale market, which has had a huge impact on the demand and supply due to the impact of GST. Wholesalers are trying to understand what to do with the inventory they purchased before the rollout of GST. They spent the entire working day, taking stock of inventory and making the necessary changes to the billing procedures. Many traders connected with experts to teach them on selling goods that were purchased before the implementation of GST so that they could avoid any “hidden irregularities” that could become a liability in the future. Customers could request for a product which was prominent before the implementation of GST and the trader cannot refuse to sell the same as well.
Traders across Delhi have also registered for the Goods and Service Taxpayer Identification Number before they begin their purchases from across the States. The customers also have to get themselves registered and obtain the GSTIN. Chartered Accountants mentioned that this is the main reason behind the businesses slacking. Chandni Chowk, known for wholesale clothing has been hit by the impact of GST, earlier, the traders did not have to pay any tax on the sale, but now they are eligible to pay 5% GST. This makes the cloth merchants unhappy with the decision. It will have an impact on the sales in the coming quarter as well.
Traders across East Delhi were noted to be apprehensive about the complexity of the new tax regime. They find it difficult to understand as well as implement. They are not worried about the rising prices, but more worried about the implementation of the ‘complex’ tax system. Traders are required to file their monthly returns online, but most do not have a computer or are unaware about the process of online billing. The traders mention that it will take them about 15 days to understand and implement the new system of accounting. It is important for the traders to maintain appropriate records in the period of transition from the old tax system to the new one. With the records well maintained, the goods will be accounted for and they can then begin with the purchases.
Due to various speculations in the market, most traders believe that GST is a complex tax regime, which will take time to be implemented in their business. Hence, for now, the business is slow and the market sluggish.